Auction House One-Upmanship

The auction house arms race
Every year the various auction houses at Monterey compete for the most spectacular headline car, the highest price, the most market credibility. Until a few weeks ago the biggest news at Monterey was the return of Rick Cole auctions. For those who are pre-baby-boomers, Cole’s long history with collector-car auctions started in 1978, with Rick Cole Auctions. He held dozens of well attended annual auto auctions in Los Angeles, Newport Beach and Palm Springs, and in 1986 was the first, and for many years the only auction during the Monterey week. Rick’s auction features a very Ferrari-heavy offering including 275 GTB/C “Clienti Competizione” s/n 7477; 250 SWB s/n 3735 and 1955 Ferrari 410 Sport s/n 0592 CM, an eight figure Ferrari and easily the “headliner car” when announced.

Gooding and RM usually vie for the most spectacular headline Ferraris and this year was not a disappointment. In our Ferrari-focused world, RM’s announcement of Ferrari, 250 LM s/n 6045 is a headliner and will be another eight-figure Ferrari, while Mecum has 375 MM 0362 AM which will assuredly be yet another eight figure Ferrari. Gooding is expected to announce they have 365 P 3-Posti s/n 8971, yet another eight-figure Ferrari. RM is also expected to announce they have 275 GTB/C s/n 6701, one of three 275 GTB prototypes built for FIA homologation. It will be yet another eight-figure Ferrari. It will be a wild and crazy week with no lack of heavy iron and some stunning new market prices.

This year’s biggest surprise, however, was the announcement on 30 June that the ex-Violati 250 GTO s/n 3851 GT will be offered at the Bonhams Quail at no reserve!! There’s no question that 250 GTO s/n 3851 GT will re-set the high-water-mark for the most expensive car ever sold at auction, putting Bonhams firmly in the auction house spotlight, (more on that later). Equally as enticing, nine more yet-to-be-identified Ferraris from the ex-Violati collection would also be at Bonhams Quail at no reserve.

When old race cars were cheap
We begin with a quick history lesson. Fabrizio Violati was born in Rome in 1935 as the youngest son of the wealthy Ferrarelle Mineral Water empire. He quickly developed a taste for speed, running in multiple Italian hill climbs. In 1965 he was offered a very used 250 GTO s/n 3851 GT and paid the then-princely sum of 2.5m lire or about $4k, the then market correct price for an obsolete race car. Over the following years Violati expanded his collection while expanding the family mineral water empire and racing America’s Cup yachts.

In 1976 Violati purchased his second Ferrari, 250 GT SWB s/n 2025 GT, and soon became a serial collector, buying up dozens of used race cars. By the late 1980s the collection included about fifty Ferraris and several dozen Abarths in multiple garages and farm houses in and around Rome. Violati also ramped up his racing, running his team Scuderia Bellancauto 512 BB LM s/n 35529 under Ferrarelle Mineral Water sponsorship in multiple FIA 1000km enduros and at Le Mans in 1982 and 1984, both DNFs. Additionally his Scuderia Campidoglio vintage race team became a familiar sight on tracks across Europe throughout the 1980s, with Violati winning the 1985 FIA Historic championship in his much modified and very fast 250 GTO s/n 3851 GT.

In the late 1980s Violati moved his collection to San Marino, an interesting story in itself. San Marino is Europe’s smallest and oldest independent republic, a tiny 24-sq-mi. independent city-state of 26,000 people atop rocky Mount Titano, a short drive off the Adriatic coast near Rímini. As a separate micro-country within Italy San Marino has many tax advantages, making it a great place to store and display a very valuable car collection outside control of the Italian tax authorities. San Marino also offers tax free shopping and sightseeing around the old town’s castle and attracts about three million tourists per year. San Marino is also known to F1 fans as the host of the Formula One Grand Prix of San Marino, which is actually held on the Italian circuit of Imola, sixty some miles from San Marino. Only in Italy!

Hiding in plain sight

The Violati Collection, officially the “Maranello Rosso Collection”, opened in 1989 and moved into the current building on the outskirts of the micro-state in 2000, safely tucked away from the Italian tax authorities. The ground floor housed the majority of the Ferrari collection which included 195 s/n 0151 S; 250 MM s/n 0312 MM; three 250 LWB TDFs, s/n 0539 GT, s/n 0619/-805 GT and s/n 1461 GT, a Series I Cab s/n 0759 GT; two 250 SWBs, s/n 2025 GT and 3615 GT and, of course, 250 GTO s/n 3851 GT. In the mid-engined group were 330 P s/n 0818, 330 P2/3 s/n 0828; 512 BBLM s/n 35529; 312 T3 s/n 033; F40 s/n 89460 and 166 F2 Formula car s/n 008. Also in the collection was a long list of other Ferraris including a 250 GTE, a Lusso, a 330 and 365 GTC, a pair of 365 GTB/4 Comp conversions and many others for a total of thirty-three very collectible Ferraris.

The open second floor offered a view of the Ferraris and showcased a variety of Ferrari related memorabilia. The basement held the Abarth Museum covering Abarth’s complete history from the early 1950s to the late 1970s. Included were multiple 1960s Fiat-Abarth 750 and 1970s Simca-based GT racers and multiple 1970s sports racers and Formula Abarths for a total of forty racing Abarths. Included were several of the later “Osella” Abarths created after Carlo Abarth sold the company to Fiat in 1971 and multiple Abarth World Rally Championship winning rally cars, making for one of the best Abarth collections on the planet.

The problems begin
Tax problems began to surface in the early-1990s with the entire collection first offered to us in 1994. Over the next twenty years the Violati collection has been offered on the dealer circuit endless times, but always with the complications of Italian tax liens, Violati’s former wife, three adult children and the General Manager of the collection, an imbroglio that has kept a small army of lawyers busy for the last two decades.

When Violati died on 21 Jan., 2010 the dealer chatter ramped up and has remained “the” hot topic on the dealer circuit since. The price has been a moving target, starting at an “ask” of 50M €uro, it had moved to 100M €uro and by last year had hit 110M €uro. In the last year the collection has been offered by most of the market’s major players at prices up to 160M €uro! Included were the museum building in San Marino plus an “offshore” tax free San Marino company, a potentially very valuable European asset.

A deal is done
By May–June the rumor mill proclaimed that the collection had been sold to an English consortium, included were all thirty-three Ferraris and forty Abarths. That consortium had offered to sell the 250 GTO and nine more of the highest profile Ferraris at the upcoming Monterey auctions. Two major auction houses were in the initial negotiations with the headliner package of ten Ferraris going to Bonhams for Monterey. Adding to the politics of the auction world, in June it also became public that Bonhams had enlisted London bankers to prepare debt financing packages of up to 200M £’s Sterling or $335M USD to back a potential sale of Bonhams. Adding further to the auction world news, on 03 July, Bonhams announced they were jumping into the Amelia Island scene in 2015 with a sale in Fernandina Beach, FL, the small town at the north end of Amelia Island, a few days before the Amelia Island Concours d′Elegance.

Bonhams is no stranger to major collection purchases, with its major backer, Evert Louman having bought the Rosso Bianco collection of three hundred Ferrari, Alfa and Maserati sports and race cars in 2006, selling many off at Monaco in May, 2006. Bonhams also currently holds the record of the most expensive car ever sold at auction, the ex-Fangio 1954 Mercedes W196R F1 car sold at Bonhams Goodwood in July, 2013 for a then-world-record $29.7m USD!

The Violati 250 GTO s/n 3851 GT, 330 P s/n 0818 and 330 P2/3 s/n 0828 were all crashed heavily in period and the GTO is the only GTO that was crashed and the driver, Henry Oreiller, died at Montlhery in 1962. Reality is that almost every GTO (excluding s/n 4219 GT) was crashed in period and many were crashed multiple times. After the crash at Montlhery in 1962 the Violati GTO was rebuilt and raced in over a dozen hill climbs in 1963. These were race cars and like all race cars they did crash, sometimes often.

Further on Evert Louwman, he is not only the major backer of Bonhams, he is also the Dutch importer for Toyota, Lexus and Suzuki. He is also the owner of the Louwman museum, over two-hundred cars in the planet’s oldest private museum (also open to the public.) Evert is a shrewd businessman and certainly a GTO buyer…. If the bidding at Quail doesn’t satisfy him it’s not a problem, he can outbid any offers he deems “inadequate” and we can bet that he does not pay a buyer’s commission!!

The right car at the right place
While some might question why a sophisticated consortium of investors would offer so many high-end Ferraris at no reserve, offering the GTO without reserve is precisely the way to maximize its value because everyone who might want one, and have the means to spend mid-to-high eight figures, will be there or have his “car guy” there. A no-reserve auction opens the list of potential buyers to everyone, not only the few who already mingle with the very exclusive “I own a 250 GTO” member’s club. There’s no lack of super-rich people who are outside the club but can afford and would like to belong to that exclusive network.

Bonhams Quail offers an unprecedented open sale of a 250 GTO that no one with the money and the desire will want to miss. Bonhams is undoubtedly already quietly taking bids and knows who the major players will be. While the big players may not be there, their “car guys” will be and will be on their phones. Even better, a mid-to-high eight figure sale will only enhance Bonhams’ market presence and value. The ex-Violati 250 GTO 3851 GT is the star car at Monterey and will certainly redefine the most expensive car ever sold at auction for years to come.